Can Nike Profit From U.S. Soccer After World Cup Fever Fades?

Nike (NYSE: NKE) CEO Mark Parker thinks soccer is here to stay. "Here" obviously refers to the United States, which is just about the only place in the world where soccer isn't already a major national sport. The English Premier League brought in more than $5 billion in revenue in its 2013-2014 season, while Major League Soccer in the U.S., a country with about five times as many people, is hanging out near the $500 million mark. So it's no surprise that Parker and Nike think the U.S. "offers huge potential in particular."

Source: Wayne Rooney on Nike.com.

Parker might be right, but he might also be riding that World Cup high that seems to infect the media and major corporations every four years. That hasn't translated into more sustained interest in the U.S., though, and this now completed World Cup looks to be no different. Attendance at MLS games hasn't seen an appreciable increase since World Cup fever hit.So what does Nike stand to gain if things turn a corner, and can it compete with the other big name in soccer?

Nike isn't sweating the lack of soccer culture in the U.S., as it has running, football, and every other sport to fall back on when it comes to selling shoes and other sports apparel. The company's North American division pulled in $12.3 billion in revenue last year. Nike's real desire is that it would be the biggest player in the U.S. soccer market going into any increase in the sport's popularity here.

On the global scene, Nike is beating Adidas (NASDAQOTH: ADDYY) , but it's a tighter race than in the U.S. Here Adidas only earned $3.4 billion last year, about a quarter of Nike's take. If you take the companies' North American sales out of the equation, Nike is just barely ahead, based on last year's annual sales, at $15.5 billion to Adidas' $15.1 billion. Nike is winning due to its dominance in footwear, but the companies were much closer on apparel last year.

Soccer offers Nike a chance to move even further ahead in the American apparel scene, taking Adidas by storm. While the companies' total revenue lines are very different, most of that is due to footwear. Globally, Nike made $8.1 billion on apparel last year, while Adidas brought in $7.9 billion. Soccer is driving a huge chunk of those apparel numbers, and Parker said that sales around the World Cup included "a few hundred million dollars" from the sale of shirts for Nike. No big deal.

Fighting the home-front battleUnfortunately, a spike in MLS popularity wouldn't necessarily hit Nike on the bottom line. Adidas has locked down the official sponsorship of Major League Soccer until 2018. In order for Nike to really get ahead in the soccer market, it would need to pick that deal up, or hope that soccer becomes so popular that people begin following international teams, many of which are sponsored by Nike.

Even with all the footwork required, Nike would still be in a great place to benefit ahead of competitors. Under Armour (NYSE: UA) has been an unstoppable force in the American football scene, but the company has almost no representation on the soccer pitch. A spike in U.S. interest would put Under Armour -- which has opted to focus on Latin American soccer clubs -- on the back foot.

That's been a small overall percentage of Under Armour's revenue, and it's fighting in a tight market. Last year, Under Armour took in a scant 6.3% of its total revenue outside of North America. South America is no different than the rest of the globe, where Adidas and Nike control about 70% of the soccer market.

There's plenty of good news for Nike if soccer does catch on in the United States, but don't hold your breath. Americans are a hard lot to shift, and no new major sport has been introduced in the U.S. since NASCAR. Even though there are more Division 1 college soccer teams than there are football teams, Americans still overwhelmingly prefer football. Luckily for Nike and its investors, the company's success doesn't hinge on soccer in the States -- it's strictly a case of winning even more.

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